Offshore wind

operational report
January December 2016
1. Introduction 3

2. Offshore wind farm status 4

3. Assets 6

4. Health and safety 7

5. Performance through the year 8

6. Regional influence of
offshore wind in the UK 10

7. Performance trends 12

8. Investment 14

9. Ownership 16 The offshore wind fleet generated over 16.4 TWh

last year, thats enough to supply the electricity needs
10. OFTO performance 18 of 4.1m homes, around 15% of the UK total

11. Knowledge 19

5.4%
Offshore wind supplied
5.4% of the UKs total
estimated electricity
consumption in 2016
CO2
This performance reduced
the UKs C02 emissions
by 7.0 million tonnes

The Crown Estate

The Crown Estate is a 13bn specialist real
estate business, focused on commercial
property in central London, prime regional
retail and offshore wind.

As managers of the seabed around England,

Wales and Northern Ireland, our business
includes wind, wave and tidal power, as well
as marine aggregates and minerals, cables
and pipelines and carbon capture and storage.

In this capacity, we play a unique role in

developing and helping sustain UK energy
supply and infrastructure, working in
collaboration with a wide range of organisations.

Scottish interests
From 1 April 2017, The Crown Estates
management duties in Scotland, including
management of the Scottish seabed, were
transferred to a new body, Crown Estate
Scotland, which reports to Scottish Ministers.

Accordingly, information on offshore wind

in Scotland has been included in this report
covering the period up to 31 December 2016.

2| Offshore wind operational report

 1 Introduction

2016 has been another strong year of growth for the UKs world-
Figure 1: UK electricity generation mix 2016
leading offshore wind sector.

An average of over 5% of the countrys electricity is now being A breakdown showing offshore wind
supplied by a technology that barely existed ten years ago. In that as a component of UK electricity
period, the number of operational turbines has multiplied ten-fold, generation in 2016, excluding oil,
pumped storage and other fuels.
with over thirty wind farms now dotted around our shores.

This growth has been driven by three main factors: world class
offshore wind resources, strong policy support, and an industry
that has risen to the challenge of becoming a mature power player.

With the sector now on track to grow its contribution to the UKs
electricity supply to 10% by 2020, the time has come to review
the basis for this success and strengthen the foundations for further
growth. Our industry abounds with heroic stories about dealing with
the unexpected, but in a world of increasing competition, we know
that what got us here, wont get us there.

As I hope these pages show, there is plenty for the UK offshore wind
sector to celebrate; from clear improvements in turbine capacity and
build out rates, to a broadening pool of investors, and a significant Gas 43.7%
construction pipeline for the year ahead. Last year alone, the UK Nuclear 21.8%
offshore wind sector exported products and services to over 15 Coal 9.3%
countries across the world, helping to deliver for the UK economy Bio energy 9.0%
as well as its industry and electricity mix. Onshore wind 6.4%
Offshore wind 5.0%*
As the sector has developed, new challenges have arrived in the Solar PV 3.1%
shape of power system integration and cumulative environmental Hydro 1.6%
impact. As a variable source of electricity generation, the offshore
wind sector needs to work together at a system-wide level to tackle Source: BEIS Energy Trends 2017

power balancing and grid stability by design, not as an afterthought. * Offshore wind generation was 5.0% of the
generation mix above, which contributed to
Similarly, as an industry, we need to work harder to understand the 5.4% of the estimated consumption in 2016.
effect that the thousands of turbines in our waters are having on our
marine ecosystems, so that these impacts can be properly managed
and the offshore wind sector can continue to grow.

As we tackle the challenges of further growth, the lessons we can

take from operational performance, our existing fleet of turbines,
will be indispensable. It is for this reason that we are once again
issuing this annual report, which aims to provide a reading guide
to the major data sources on operating wind farms. Our thanks
to all those who have provided content, in particular the SPARTA
operators consortium, the G+ health and safety consortium, the
Green Investment Bank, North East Lincolnshire Council, Innogy,
Llandrillo College and the Port of Ramsgate.

Huub den Rooijen

Director of Energy, Minerals and Infrastructure
The Crown Estate

www.thecrownestate.co.uk|3
 2 Offshore wind
farm status

By the end of 2016, there were 29 fully operational

Figure 2: UK offshore wind project pipeline April 2017
offshore wind farms, with construction activity
commencing on a further 5.3 GW of new capacity.
Operational: Total capacity of Under construction: Total
These new projects will deliver more than the wind farms that have been fully capacity of wind farms that are
entire installed capacity of the current operational commissioned. under construction or where the
fleet, demonstrating the growing scale of offshore developer has confirmed a final
wind as part of the UKs electricity generation mix. Capacity MW q investment decision, but are not
yet fully operational.
Of this 5.3 GW capacity, some 700 MW should 01 Barrow 90
attain full commercial operation during 2017. 02 Blyth 4
Up to capacity MW q
03 Burbo Bank 90
Meanwhile the delivery of the remaining 4.6 GW 30 Aberdeen Demonstration1 92.4
04 Greater Gabbard 504
marks 2017 as one of the busiest construction 31 Beatrice1 588
05 Gunfleet Sands 12
years for offshore wind, delivering benefits around 32 Blyth Demonstration 41.5
Demonstration
several of the UKs regional ports and harbours Phase 1
06 Gunfleet Sands 1 108
(see also page 10). 33 Burbo Bank Extension 258
07 Gunfleet Sands 2 65
34 Dudgeon 402
08 Gwynt y Mr 576
35 East Anglia ONE 714
09 Humber Gateway 219
36 Galloper 336
10 Inner Dowsing 97
37 Hornsea Project 1 1,218
11 Kentish Flats 90
38 Hywind 2 Demo 30
12 Kentish Flats Extension 49.5 (Buchan Deep)1
13 Levenmouth Demonstration 7 39 Race Bank 573
Figure 3: UK renewable electricity 14 Lincs 270 40 Rampion 400
generation by fuel type 2016 15 London Array 630 41 Walney Extension 659
16 Lynn 97 Total 5,312
Excluding oil, pumped storage and other 17 North Hoyle 60
fuels, renewable energy represented 25% 18 Ormonde 150
of the UKs electricity generation mix in 2016, Government support on offer:
19 Rhyl Flats 90 Total capacity of wind farms that have
of which 5% was provided by offshore wind.
20 Robin Rigg East1 90 secured a Contract for Difference
21 Robin Rigg West1 90 or whose publicly stated timescales
12 are consistent with accessing the
22 Scroby Sands 60 Renewables Obligation (RO).
Onshore wind
6.4% Offshore wind 23 Sheringham Shoal 317
10 24 Teesside 62 Up to capacity MW q
25 Thanet 300 42 Neart na Gaoithe (NNG)2 448
26 Walney (Phase 1) 184 Total 448
9%
8 27 Walney (Phase 2) 184
28 West of Duddon Sands 389
Awaiting the outcome of Contract for
29 Westermost Rough 210 Difference Round 2, for which applications
6 Total 5,095 were submitted in April 2017.

5%
4 1. Asset transferred to the Crown Estate Scotland (Interim Management) from April 2017
following the devolution of the Scotland Portfolio to the Scottish Government.
2. An arbitral procedure relating to the CFD, decided in favour of NNG, preserving
3.1% its CFD (March 2017)
2
1.6% NOTE: CFDs are private law contracts between CFD generators and the Low Carbon
Contracts Company (LCCC), a government-owned company that manages CFDs at
arms length from government.
0
Quoted capacity refers to the property rights held with The Crown Estate and does not
Wind Bio energy Solar PV Hydro
necessarily reflect the build out capacity permissible under current or future statutory
planning permissions.
Source: BEIS Energy Trends 2017

4| Offshore wind operational report

 97%
In 2016 offshore wind supplied the
equivalent of 97% of London, Birmingham
and Manchesters domestic electricity
requirements (UKs 3 biggest cities)

Territorial Waters Limit

UK Continental Shelf
United Kingdom

Republic of Ireland

31

38

30

42
13

32
20 02
21 24

27 18 37
26 29
41
01 09
28
03 39 34
08 14
19 17 33 10
16 23
22

35
07 04
06 36
05 15
12
11 25

40

www.thecrownestate.co.uk|5
 3 Assets

Figure 4: UK offshore wind assets 31 December 2016

*Sites having reached

Final Investment Decision
(FID) and those under
construction.

Offshore Offshore Export Offshore Wind

turbines substations cables Masts farms
q q q q q
Operating 1,463 20 56 23 29
Under construction* 830 14 25 1 14
Total 2,293 34 81 24 43

At the end of December 2016 there were 1,463

fully operational offshore wind turbines on the UK
seabed, with a further 830 under construction.
This figure includes some 25 wind turbines which
were installed and operating at the Burbo Bank
Extension site, but which had not yet attained
works completion by 31 December 2016.

Compared with previous years, the volume of

construction activity reduced in 2016, but we look
forward to a strong development pipeline in 2017,
with seven new sites looking to reach first power
a level of development activity not seen since 2010.

The planned sites reaching first power in 2017

include the worlds first floating offshore wind farm
test and demonstration array, Hywind, off the east
coast of Scotland.

In 2016 we saw significant construction activity

in northern Europe, with offshore wind spreading
to North America, east Asia, India and elsewhere.
According to the Global Wind Energy Council, the
UK remains the worlds largest offshore wind market,
with 5.1 GW (36%) of installed global capacity.

Wind farms having

achieved FID (Final Wind farms starting
Investment Decision) construction Wind farms
Asset
Aberdeen Demo (lease signature) achieving
activity first power
Beatrice Blyth Demo Phase 1
in 2016
Blyth Demo Phase 1 East Anglia ONE Burbo Bank Extension
Hornsea Project 1 Walney Extension
East Anglia ONE

6| Offshore wind operational report

 4 Health and safety
Constructing, operating and maintaining offshore
wind farms requires a constant focus on the
health and safety of workers in the challenging
conditions they often encounter. Recognising
this, the Global Offshore Wind Health and Safety
Organisation (G+, formerly G9) was established
in order to promote and maintain the highest
standards of health and safety throughout
the life cycle of offshore wind farms in the
UK and internationally.
As asset owners and operators, G+ see
themselves as being in the best place to perform
the role of creating and delivering world class
health and safety performance across all of the
activities in the offshore wind industry. Senior
executives of the G+ companies have committed
resources from their own teams, and have also
met under the auspices of the G+ Board to actively
lead the industry in finding solutions to the safety
challenges facing offshore wind projects.
Since the formation of the G+, members
have committed to providing health and safety
information and statistics for analysis and to
share lessons learned. The Energy Institute (EI),
secretariat of the G+, collates the health and
safety data and produces annual reports which
can be found at: https://www.gplusoffshorewind.
com/work-programme/hse-statistics.
The 2016 health and safety statistics are due to
be published in June 2017, and figure 5 provides
an early insight into the summary of the incident
data reports collected. Initial analysis shows that
hazard reporting has increased in 2016, but other
incident reporting metrics have remained relatively
constant, despite an ever increasing number of
wind turbine generators.
Continual improvement lies at the heart of G+
initiatives as evidenced by the progress in rolling
out the G+ Good Practice Guidelines (GPGs)
such as:
Working at height in the offshore wind industry
The safe management of small service vessels
used in the offshore wind industry
These two first GPGs were published in December
2014. Since then a number of G+ members
have undertaken site audits against the guideline
recommendations in order to ascertain their level
of compliance. This work has been complemented
through the use of the GPGs by various supply
Figure 5: Key health and safety performance facts and figures 2016
G+ 2016 Incident Data Summary
Consequence data (UK sites only)
Hazards 539
Near hits 269
First aid 62
Medical treatment injuries 41
Restricted work day incident 34
Lost work day incidents 38
Sharing experience and knowledge: Dropped Objects
The G+ Focal Group believes that dropped objects present significant
safety challenges in the construction and operational activities at
offshore wind farms. Investigations into the incidents by individual G+
member companies have shown that these occurred due to a number
of contributing factors, including: work processes, behaviour, design,
environment and the inappropriate securing of tools and equipment.
A number of existing tools to reduce this risk are already available, such
as the Dropped Objects Prevention Scheme (DROPS) from the oil and
gas industry. A G+ Focal Group workstream will review the transferability
of DROPS to the offshore wind industry, as well as incorporating existing
guidance from some G+ members into the study.
The resultant guidance document will assist offshore wind developers
and operators to establish the underlying causes behind dropped
object incidents, identify and assess the hazards, and apply appropriate
preventive and mitigating controls and barriers.
chain companies, cross-referencing in a number
of IMCA and ISO standards, and by the regulatory
authorities in benchmarking safety performance
at offshore wind farms.
All these bodies and other key industry stakeholders
were invited to provide feedback on the GPGs in
2016 and given the opportunity to identify where
updates were required. Based upon a review of
this feedback within the Focal Group, both GPGs
will be updated in order to ensure they remain fit
for purpose and continue to be used by industry
to improve H&S performance.
Kate Harvey
General Manager of G+ Global Offshore Wind
Health and Safety Organisation
www.thecrownestate.co.uk|7
 5 Performance
through the year

Production
Over the last five years, offshore wind electricity production in the UK has been
dominated by its top ten producers. They have contributed an average of just
under 75% of the total electricity produced by the sector (Figures: 6 & 9). Over
the coming years, these producers look set to be overtaken by Beatrice, Walney
Extension and Hornsea Project 1, which are all currently under construction.
The last of these, Hornsea 1, will be the worlds largest ever offshore wind farm.

Offshore wind produced 5% of the UKs total generation, excluding: oil,

pumped storage and other fuels during 2016, with all renewable sources
accounting for 25% of that.

Figure 6: Top 10 generators between 20122016

Ormonde 2,588,078
Walney 1 3,223,053
Walney 2 3,381,142
Lincs 3,431,628
Gwynt y Mr 3,621,785
West of Duddon Sand 3,729,771
Thanet 4,280,782
Sheringham Shoal 4,914,438
Greater Gabbard 8,661,465
London Array 9,101,671

Figure 7: Offshore generation by asset*

1 London Array 14%

2 Greater Gabbard 11%
3 Gwynt y Mr 10%
Total 4 West of Duddon Sands 9%
generation 5 Sheringham Shoal 6%
in 2016 6 Lincs 6%
16,404,560
MWh 7 Westermost Rough 5%
8 Thanet 2 5%
9 Humber Gateway 5%
10 Walney 1 4%
Other 26%

* Supplied from 30 wind farms

8| Offshore wind operational report

Number of UK Estimated
homes supplied by
offshore wind farm
electricity generation 12% 16% 15% 18%
7%
10% (4.4m) (4.1m) (4.8m)
Note: wind speeds and (1.8m) (2.7m) (3.3m)
energy yield in 2015 were
above the long term average. 2012 2013 2014 2015 2016 2017

Positive growth on capacity factors

Analysis of the UKs fleet of offshore wind farms suggests a positive outlook
for growth in capacity factors. Figure 8 groups capacity factors by technology,
in this case rotor diameter. The graph does not represent projects in date
order, but does consider averages over the last 5 years, with each solid
shape representing the capacity factor achieved by a wind farm. This shows
that capacity factors for wind turbines with a rotor diameter of 120m + are
averaging almost 44%, whereas the technology planned for deployment on
sites that are under construction suggests an estimate of just under 48%.
It demonstrates increasing efficiencies in the technology, management and
performance of assets across the UK seabed.

Figure 8: Generation over the last 5 years (20122016)

55

50

45
Capacity factor

40

35

30

25

20
Each solid shape represents a wind farm
80m 107m rotor diameter 120m+ rotor diameter
112m 120m rotor diameter Under construction estimate
Average for technology type

Figure 9: Generation over the last 5 years (20122016)

20,000 3,000

18,000
2,500
16,000

14,000
2,000
12,000
GWh

10,000 1,500

8,000
1,000
6,000

4,000
500
2,000

0 0
2012 2013 2014 2015 2016
Top ten producers Yearly total Average Max

www.thecrownestate.co.uk|9
 6 Regional influence of
offshore wind in the UK

The UKs regional ports and harbours have

seen significant investment in operations and
maintenance bases (O&M), bringing local
economic benefits, including job creation.
In many cases, these new jobs complement
existing industries, some of which have been
in decline over the last 30 years. There are also
lasting benefits to local supply chains throughout
the year, not just on a seasonal basis. The map Wick Harbour
below takes stock of existing maintenance
bases (as of 31 December 2016), as well as
planned bases of those under construction.

Peterhead
Territorial Waters Limit United Kingdom
UK Continental Shelf Republic of Ireland Aberdeen

OM Base (Operational/Under construction)

Llandrillo College Fife EnergyPark

We are really proud of our bespoke and award

winning Turbine Technician Apprenticeship
Programme. It was designed to address the
future needs of the wind industry and wider
renewable energy sector, whilst supporting
the development of new skills for local people Belfast
in areas neighbouring our operations. The Harbour Workington
programme has been expanded by Innogy Port of Hartlepool
every year since its launch in 2012, with 26
apprentices now placed on the programme, Port of Barrow
some 24 of whom remain within the industry.
John P Davies North Hoyle
Operations Manager Grimsby
Liverpool Harbour

Port of Mostyn
Innogy Renewables UK Limited
Wells-next-the-Sea
Great Yarmouth

Lowestoft

Harwich
Brightlingsea

Ramsgate

New Haven

As apprentices we are incredibly proud to be

part of the new generation helping to drive the
renewables industry forward
2015/16 and 2016/17 intake of Wind
Turbine Apprentices at Llandrillo College

10| Offshore wind operational report

North East Lincolnshire Council
Operational
Capacity MW q q O&M Base
The offshore wind industry has
Barrow 90 Port of Barrow
breathed a breath of fresh air
Burbo Bank 90 Liverpool Harbour
into our town of Grimsby. We
Greater Gabbard 504 Lowestoft
are pleased to see the creation
Gunfleet Sands Demo 12 Brightlingsea
of around 400 new direct high
Gunfleet Sands 1 108 Brightlingsea
level jobs created in and around
Gunfleet Sands 2 65 Brightlingsea
our port, with many more
supporting these indirectly. Gwynt y Mr 576 Port of Mostyn
We have major companies such Humber Gateway 219 Grimsby
as DONG Energy, E.ON, Siemens, Inner Dowsing 97 Grimsby
MHI Vestas Offshore and their Kentish Flats 1 90 Ramsgate
associated supply chains investing in the order of 50m in new buildings, Kentish Flats 2 49.5 Ramsgate
marine infrastructure and training facilities. This has not only improved Levenmouth Demo 7 Fife Energy Park
the environment but acted as a catalyst for even further development. Lincs 270 Grimsby
The future is exciting, with many more turbines due to be deployed in London Array 630 Ramsgate
the Southern North Sea, we know that Grimsby will continue to grow Lynn 97 Grimsby
and become a world renowned centre over the coming years. North Hoyle 60 Port of Mostyn
Angela Blake Director of Economy and Growth Ormonde 150 Port of Barrow
North East Lincolnshire Council Rhyl Flats 90 Port of Mostyn
Robin Rigg East 90 Workington
Robin Rigg West 90 Workington
Scroby Sands 60 Great Yarmouth
Port of Ramsgate Sheringham Shoal 317 Wells-next-the-Sea
Teesside 62 Port of Hartlepool
Thanet 300 Ramsgate
Walney 1 184 Port of Barrow
Walney 2 184 Port of Barrow
West of Duddon Sands 389 Port of Barrow
Westermost Rough 210 Grimsby

Under construction
Capacity MW q q O&M Base
Aberdeen Demo 92.4 Aberdeen
Beatrice 588 Wick Harbour
The Port of Ramsgate is very experienced in dealing with all aspects Blyth Demo Phase 1 41.5 Blyth
of wind farm projects, having facilitated projects from construction to Burbo Bank Extension 259 Liverpool Harbour
generation, and is currently home to operations and maintenance for
Dudgeon 402 Great Yarmouth
a total of 320 offshore turbines along the Thanet coastline.
East Anglia ONE 714 Lowestoft
Galloper 336 Harwich
An excellent working relationship has been nurtured between the offshore
Hornsea Project 1 1,218 Grimsby*
sector and existing stakeholders by the Port, in conjunction with both the
Hywind 2 Demo 30 Peterhead
teams associated with the two operations and maintenance facilities. These (Buchan Deep)
relationships are strengthened and maintained through the meetings of the
Race Bank 573 Grimsby
Harbour User Group, the Port User Group and the Offshore Interface group.
Rampion 400 Newhaven
Walney Extension 659 Port of Barrow*
The arrival of the offshore sector has directly provided a range of both skilled
and semi-skilled, secure jobs for local people and this, coupled with uplift Construction hub
in associated local supply chain, continues to boost our districts economic
prosperity. We look forward to embracing any future offshore renewable Belfast Harbour
opportunities including the expansion of existing offshore installations Belfast Harbour serves as a regional construction
and the arrival of exciting new green and blue technological advances. hub for offshore wind farm projects.
Robert Brown Harbour Master and Maritime Operations
Manager, Port of Ramsgate * To be confirmed

www.thecrownestate.co.uk|11
 7 Performance trends

Construction rates offshore increase

Figure 10: MW installed per day from implementation through Works Completion

1.0

0.9

0.8

0.7

0.6
MW

0.5

0.4

0.3

0.2

0.1

0.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Figure 10 depicts installation rates, from the date offshore works start, to
Figure 11: Average installation rate by project capacity
when the final wind turbine reaches commercial operation. The overall story
is very positive, demonstrating that the build rate of the industry is increasing
and becoming more efficient. There is a clear correlation between the size of q Wind farm qM  W installed
the wind farm and installation speed, with larger sites appearing to benefit total power per day
from economies of scale when placing contracts and hiring vessels. 0-100 MW 0.17
100-300 MW 0.36
In Figure 11, average build rates are grouped according to project capacity.
300 MW+ 0.62
It should be noted that London Array, located in the Thames Estuary, was
built with remarkable speed (0.92 MW/Day).

12| Offshore wind operational report

SPARTA
Currently in its fourth year of operation, 2016
Figure 12: Yearly participation
saw increased participation in SPARTA, bringing
virtually all UK offshore wind farms into the
100 35
programme (Figure 12). % of capacity in UK waters
Number of farms
In 2016, the new production based availability
80 29
metric was established and assurance processes
Percentage of capacity

linked to this and the various repair metrics in

Number of farms
the Key Performance Indicators (KPI) (Figure 13)
60 23
were successfully carried out across all wind
farm owner operators. This demonstrates
that the programme is now reaching a stage 40 17
of maturity, where new valuable metrics are
being rolled out and best practice in measuring
and member reporting against these is being 20 11
embedded through collaboration. Consequently,
confidence in the monthly benchmarking reports
has substantially increased and this has enabled 0 5
trustworthy comparisons of wind farm performance Dec 2014 Dec 2015 Dec 2016
against peers.

The continued growth of data provision and Figure 13: SPARTA KPIs
assurance against industry KPIs has enabled
the SPARTA project to publish its first portfolio
review looking at the impact of various site and
environmental characteristics on relevant KPIs. Sub-system repairs 28
Major system repairs 9
The full report is available here: https://ore.catapult.
Production and availability 10
org.uk/press-release/sparta-review-launched-
giving-insights-first-full-year-successful-operations/ Operations and logistics 13
Environmental 10
Co-sponsored by The Crown Estate and the
Offshore Renewable Energy Catapult and directed
by an industry steering group, further development
of the programme was approved in 2016, including
plans to:

Release of version 3.0 of the benchmarking

system, with greatly improved user functionality
and analysis capability.

Introduce a pilot project with G+ to investigate

the value of integrating performance metrics
with HSE statistics.

Expand the programme to encompass projects

in European waters to enhance the value of the
database for all participants

www.thecrownestate.co.uk|13
 8 Investment

2016 saw the changes in various project shares

of offshore wind farms, as original developers
divested themselves of shares to free up
capital for reinvestment into the offshore
wind development pipeline.

More pension funds and corporates entered

the market, including at the construction phase.
For example the Danish pension provider PKA
and the parent company of the Lego Group
(KIRKBI) purchased a 50% stake in the 258MW
Burbo Bank Extension Project from DONG.

Funds also took an increasing share of the offshore

wind market as the global appetite for infrastructure
investment soared. According to the Financial
Times, investment in global infrastructure hit a record
$413bn in 2016, up 14% on the previous year.

Figure 14: Principal offshore wind transactions in 2016

q Site name q Capacity q Owner(s) q New investor(s) q Stake q Value

(MW)
Development and under-construction
Beatrice 588 SSE, Repsol Nuevas Energias UK, Copenhagen Infrastructure +10% (to 3
Copenhagen Infrastructure Partners Partners 5% in total)
Burbo Bank 258 DONG PKA and KIRKBI A/S 50% Approximately
Extension 660m
Inchcape 784 Repsol Nuevas Energias UK State Development and Investment 100% Note 1
Corporation (SDIC) Power
Beatrice 588 SSE, Repsol Nuevas Energias UK, State Development and Investment 25% Note 1
Copenhagen Infrastructure Partners Corporation (SDIC) Power
Aberdeen 92.4 Aberdeen Renewable Energy Group Vattenfall 25%
Galloper 336 Innogy, GIB, Siemens Financial Sumitomo Corporation 12.5% Note 2
Services, and Macquarie Capital
Race Bank 573 DONG Macquarie European Infrastructure 50%
Fund 5 and Macquarie Capital
Operational wind farms
Lynn and 194.4 Centrica and EIG Global Energy UK Green Investment Bank 100% N/A
Inner Dowsing Partners Offshore Wind Fund
Funds managed by BlackRock
Investment Management
North Hoyle 60 Zephyr Investments Zephyr Investments Note 4
Funds managed by BlackRock Investment Management
Humber Gateway 219 E.ON Humber Gateway OFTO Limited 100% 160.3m
Westermost 210 DONG, Maurubeni Corporation, UK TC Westermost Rough 100% 156.7m
Rough GIB OFTO Limited

1. The acquisition of the Inchcape project and 25% of Beatrice was
reported at a total cost of 238 million.
2. Sumitomo Corporation is investing alongside Macquarie Capital
in Galloper and so will indirectly take a 12.5% stake in the project.
3. The 423m is a reported Enterprise Value for the acquisition.
4. In July 2016 RWE sold its investment in Zephyr Investments Limited,
the indirect parent company of the North Hoyle project company. As at
31 December 2016, Zephyr Investments Limiteds stake of the North Hoyle
project was indirectly owned 66.67% by JP Morgan and 33.33% by M&G.

14| Offshore wind operational report


The offshore wind industry a financial perspective
The past twelve months have been
significant for the offshore wind industry.
Transaction volumes were at a record
high according to projects tracked
by datLive [source: inspiratia]. Total
transaction volumes for global offshore
wind were almost US$17bn, which
included US$12bn invested in greenfield
projects, and the UK led the way with
some US$4bn in greenfield transactions.
Furthermore, we saw highly competitive
tenders in the Netherlands, Denmark
and Germany and an upsurge in interest
in markets outside of Europe, notably
in south-east Asia and the eastern
seaboard of the US.
A combination of factors has brought
about this growth story.
Cost reduction has been a major
determinant. Over the past four
years, the levelised cost of energy
(LCoE) for offshore wind has been
steadily falling. It is estimated that
projects reaching completion in 2
020 will have a 25% lower LCoE
than those completed in 2010/11
[source: Catapult: Offshore Wind
Cost Reduction November 2016].
On the technical front, the industry
is developing a consistent track
record of delivery of projects through
construction, both in terms of cost
and timescale, and into operations.
Advances are being made in such
New study into UK Offshore Wind Variability
A new study into the UKs offshore
wind resource undertaken by DNV GL
on behalf of The Crown Estate in 2016
revealed that variability in wind speeds
is significantly lower than previously
understood and paves the way for
improved project projections which
can help bring down the cost of energy.
Historical studies of the inter-annual
variability (IAV) of wind speed have
areas as turbine design, transmission
and turbine installation vessels.
This is all good news for the offshore
wind sector and this positivity has
brought in new investors to the sector,
attracted by significant investment
volumes against an acceptable risk
profile. We can broadly categorise these
investors into five types utilities, project
developers, corporates (particularly oil
and gas players), institutional investors
and supply chain companies. It is,
perhaps, the emergence of institutional
investors that is the most striking. These
investors, which are typically risk-averse
funds seeking long-term predictable
cash flows, are becoming increasingly
comfortable with construction and
operational risk and some are now
prepared to invest during late stage
development.
Looking at debt, commercial banks have
long supported the offshore wind sector
and, importantly, from the earliest days,
these institutions were prepared to take
construction risk. Whilst balance sheet
finance remains an important feature of
the market, we are seeing increasing
opportunities for project (non-recourse)
finance and new lenders, including
institutional investors, are emerging.
Given this competitive market, together
with the advances in technology, both
equity and debt providers are re-thinking
focused on measurements from onshore
meteorological stations. These studies
have created an industry standard
estimate of wind speed IAV at 6%, which
has been widely adopted across many
global markets since the early 90s.
The Study on UK Offshore Wind
Variability available at https://www.
thecrownestate.co.uk/energy-minerals-
and-infrastructure/offshore-wind-energy/
4 YEARS
Offshore wind generation in 2016
would keep the UK national rail
network on the move for 4 years!
their commercial approach, including
risk-sharing models in construction
for example, time versus yield based
production wind turbine warranties.
While time based warranties have
been an industry standard for many
years, the yield warranty concept has
gained increasing currency in trying to
attain the desired outcome to optimise
asset performance. Choosing the right
approach for a project requires a clear
understanding on, inter alia, the way
that data is gathered and analysed,
how routine maintenance is scheduled
and how the underlying commercial
relationships function. Whilst long-term,
risk averse, fund investors can work
effectively with these contracts, it is
necessary that they have the requisite
degree of market knowledge to work
towards asset optimisation. If that
market knowledge is not there, the
concern is that any optimisation could
potentially be diluted because the
contracts are caveated by the investor
to protect its position.
Nick Gardiner
Managing Director, Head of Offshore
Wind Green Investment Bank
has now revealed an IAV range of
4-5.5% to be more appropriate across
the UK offshore environment. This report
reveals a significant improvement in
our understanding of the UKs offshore
wind resource. We hope that industry
will begin to reflect this reduced variability
into their assessments to help create a
more attractive financing proposition for
investors and support continued cost
reduction over the long term.
www.thecrownestate.co.uk|15
 9 Ownership

Wind farms
Ownership of offshore wind is evolving. More
energy and infrastructure, and pension funds
have entered the market as project shares have
been split further. There are very few projects
where ownership is retained by one company
alone, albeit E.ON is the exception here and
to a lesser extent, Vattenfall. Ownership is still
dominated by large scale developers but not solely
by the big six. The Scandinavian influence on the
UK is not limited to furniture design and the Nordic
Noir television genre but extends, significantly, to
renewable energy. Danish energy giant, DONG has
the largest share of the UKs offshore wind sites in
operation and under construction, with a significant
presence also from Swedish company Vattenfall.
Norwegian company Statoil is growing its presence
too through its interest in several offshore wind
sites, including Dudgeon off the Norfolk coast
and Hywind off the east coast of Scotland, both
projects are currently under construction.

Figure 15: Operational offshore wind farm ownership as at 31 December 2016

q Project q Company (Share ownership) q Project q Company (Share ownership)

Barrow 100% DONG Energy Lynn 61% GIB Offshore Wind Fund
Blyth Offshore 100% E.ON 39% BlackRock
Burbo Bank 100% DONG Energy North Hoyle 100% Zephyr Investments*
Greater 50% Innogy Ormonde 49% AMF
Gabbard 50% SSE 51% Vattenfall
Gunfleet Sands 100% DONG Energy Rhyl Flats 50.10% Innogy
Demonstration 24.95% Greencoat UK Wind
Gunfleet 24.95% Marubeni Corporation 24.95% GIB Offshore Wind Fund
Sands I 24.95% Development Bank of Japan Robin Rigg East 100% E.ON
50.10% DONG Energy Robin Rigg West 100% E.ON
Gunfleet 24.95% Marubeni Corporation Scroby Sands 100% E.ON
Sands II 24.95% Development Bank of Japan
Sheringham 40% Statkraft
50.10% DONG Energy Shoal 20% GIB Offshore Wind Fund
Gwynt y Mr 10% Siemens 40% Statoil
30% Stadtwerke Mnchen
Teesside 100% EDF Energy Renewables
50% Innogy
Thanet 100% Vattenfall
10% UK GIB
Walney 1 50.10% DONG Energy
Humber Gateway 100% E.ON
25.10% SSE
Inner 61% GIB Offshore Wind Fund 24.80% PGGM & Ampre Equity Fund
Dowsing 39% BlackRock
Walney 2 50.10% DONG Energy
Kentish Flats 100% Vattenfall 25.10% SSE
Kentish Flats 100% Vattenfall 24.80% PGGM & Ampre Equity Fund
extension
West of 50% DONG Energy
Levenmouth 100% ORE Catapult Duddon Sands 50% Scottish Power
Demonstration
Lincs 50% Centrica Westermost 50% DONG Energy
Rough 25% Marubeni Corporation
25% DONG Energy
25% Siemens 25% UK GIB

London Array 25% DONG Energy

(Phase 1) 25% Caisse dpt & placement Qubec
30% E.ON
* Zephyr Investments stake in North Hoyle owned 66.7% JP Morgan
20% Masdar
and 33.3% M&G at 31 December 2016

16| Offshore wind operational report

 102%
In 2016 offshore wind supplied the equivalent
of 102% of the domestic electric requirement
of London, Manchester and Liverpool

Offshore Transmission Owners (OFTOs)

Transmission Capital Partners and Blue Transmission dominate OFTO
Figure 17: OFTO ownership
ownership. But other players, such as the infrastructure company Equitix,
are taking an increasing share in the sector, most recently working as
consortium partner with Balfour Beatty on the Humber Gateway offshore
transmission purchase.

Figure 16: Offshore Transmission Owner (OFTO) Transactions

Offshore transmission transfer timelines for transmission assets.

For more information www.ofgem.gov.uk/electricity/transmission-
networks/offshore-transmission/offshore-transmission-tenders

Commenced April 2016

Transmission assets:
Tender Burbo Bank Extension
Round 4 Transmission Capital Partners 40%
Blue Transmission 27%
Commenced October 2016 Equitix 19%
Transmission assets: Balfour Beatty Investments 8%
Tender Dudgeon Rampion
Round 5 Macquarie Corp Holdings 2%
Galloper Walney
Race Bank Extension 3i infrastructure Plc 2%
Frontier Power Ltd 2%

Figure 18: OFTO ownership as at 31 December 2016

q Project qC
 ompany (Share ownership) q Connection voltage q Interfacing party*
Barrow OFTO 100% Transmission Capital Partners 132 kV DNO
Greater Gabbard OFTO 100% Equitix 132 kV Transmission
Gunfleet Sands OFTO 100% Transmission Capital Partners 132 kV DNO
50% Balfour Beatty
Gwynt y Mr OFTO 132 kV Transmission
50% Equitix
50% Balfour Beatty
Humber Gateway OFTO 132 kV Transmission
50% Equitix
Lincs OFTO 100% Transmission Capital Partners 400 kV Transmission
London Array Phase 1 OFTO 100% Blue Transmission 400 kV Transmission
Ormonde OFTO 100% Transmission Capital Partners 132 kV DNO
Robin Rigg OFTO 100% Transmission Capital Partners 132 kV DNO
Sheringham Shoal OFTO 100% Blue Transmission 132 kV DNO
20% Balfour Beatty Investments
Thanet OFTO 132 kV DNO
80% Equitix
Walney 1 OFTO 100% Blue Transmission 132 kV Transmission
Walney 2 OFTO 100% Blue Transmission 132 kV DNO
33% Frontier Power Ltd
West of Duddon Sands OFTO 33% 3i infrastructure Plc 400 kV Transmission
33% Macquarie Corp Holdings
Westermost Rough OFTO 100% Transmission Capital Partners 275 kV Transmission
* DNO (Distribution Network Operator)

www.thecrownestate.co.uk|17
 10 OFTO Performance

Transmission system availability for Offshore

Figure 19: Offshore transmission networks % annual availability
Transmission Owners (OFTOs) is published
annually by National Grid on a financial year
basis (not on a calendar year basis). 2016-17 q Project 2013-14 q 2014-15 q 2015-16 q
data is expected to be published in July 2017, Robin Rigg 99.85 98.19 99.99
so the information in this section utilises data
Gunfleet Sands 100 99.53 100
published by National Grid for the period April
2015 to March 2016. Barrow 99.64 100 99.88
Ormonde 100 99.93 100
In the preceding table on page 17 are details of Lincs N/A 100 99.96
the OFTOs, including their connection voltages Westermost Rough N/A N/A 100
and interfaces with either the National Electricity Walney 1 99.99 100 100
Transmission System or the lower voltage
Walney 2 94.89 100 92.47
distribution networks owned and operated
by Distribution Network Operators (DNO). Sheringham Shoal 99.20 99.84 100
London Array 99.97 99.90 99.98
Greater Gabbard 99.81 100 100
Annual Availability Gwynt y Mr N/A 82.59 82.58
Thanet N/A 82.47 83.05
The operators of the offshore transmission
systems are incentivised through the regulatory West of Duddon Sands N/A N/A 100
framework to provide prescribed minimum levels Note: Availability data for the Humber Gateway OFTO was not published at the time of writing
of availability. The default for this is 98%, with this report.
specific targets established for each OFTO.

National Grid collates availability data for each

OFTO on an annual basis this includes all
outages that originate on an OFTOs system
but excludes outages that originate elsewhere.
For example on a wind farm generator or DNO.
The OFTO availability incentive then adjusts the
reported outage data to calculate incentivised
performance for each OFTO.

In 2015/16, the average OFTO availability

was 95.99%. However, this masks significant
differences across OFTOs, where performance
ranged between 82.58% and 100%. Whilst the
majority of OFTOs performed at, or very close to,
100%, a few systems had issues that impacted
their performance. The most significant issues
occurred on the transmission systems that
connect Walney 2, Gwynt y Mr and Thanet,
95.99% Annual System Availability of Offshore Networks for 2015-16
Figure 20: OFTO availability trend
100 Average weighted by MW
Availability incentive level
99
All OFTO average % availability

where performance was significantly below target.

Outages were for various reasons but those 98
with the greater impact include: a fault with the
Walney 2 export cable in December 2015, with 97
investigation and repair running until March 2016;
at Gwynt y Mr there was a primary system fault 96
on export cable 1 and on cable 2 respectively;
and at Thanet there were primary system faults on 95
cable 1 in April 2015 and cable 2 in March 2016.
94
The three year view is considered in Figures 19
and 20. More details can be found in the National
93
Grids National Electricity Transmission System 201314 201415 201516
Performance Report.

18| Offshore wind operational report

 11 Knowledge
The Crown Estate unlocks value in the UK seabed through
enabling activity, carrying out research to help reduce the
levelised cost of offshore wind energy and reduce barriers
to consenting for sustainable development. A selection of
activity related to offshore wind is referenced below.
Offshore Renewables
Joint Industry Programme
www.orjip.org.uk
Offshore Renewables Joint Industry Programme (ORJIP)
is a UK-wide collaborative programme of environmental
research with the aim of reducing consenting risks for
offshore wind and marine energy projects.
Currently there are two ORJIP streams:
Offshore Wind and Ocean Energy. They bring
together industry, regulators, statutory nature
conservation bodies and academia to work
together on key environmental and consenting
issues that the respective sectors are facing.
Marine Data Exchange
www.marinedataexchange.co.uk
The Marine Data Exchange provides access to survey
data and reports collated during the planning, building
and operating of offshore renewable energy projects.
In 2016, over 500 new surveys were added to the Marine
Data Exchange, delivering a 22% increase in total available
data. The platform, now one of the biggest sources of
marine data in the world, includes a host of new wind, wave
and tidal data, as well as landscape assessments, bird and
mammal population studies, habitat characterisations and
archaeological studies.
Offshore wind electricity map
thecrownestate.co.uk/owmap
An interactive map which refreshes every hour to estimate the
total electricity being generated by offshore wind farms in the
UK. It is unique in separating offshore wind from a total wind
generation figure and it includes estimates for embedded
generators not directly supplying the National Grid.
Offshore wind Atlas
thecrownestate.co.uk/owatlas
This is a significant modelled dataset for the UKs offshore
wind resource, informed by a 30 year time horizon.
The modelling was undertaken by the Met Office using their
world-leading Numerical Weather Prediction capabilities,
and verified against on-site wind measurements to provide
confidence in the dataset. The wind data provides a higher
resolution picture of the UKs offshore wind resource to help
inform offshore wind farm planning and development
Understanding the impacts
of offshore wind on well-being
thecrownestate.co.uk/owfwb
This study by Plymouth Marine Laboratory explores
the impacts of the UK offshore wind industry in terms
of well-being. It uses an ecosystems services approach
as well as the five capitals model developed by Forum
for the Future.
Working with fisheries
The Crown Estate provides the chair and secretariat for the
Fishing Liaison with Offshore Wind and Wet Renewables
(FLOWW) group. Established in 2002 to foster a good
relationship between the fishing and offshore renewables
industries and to develop and promote best practice. More
information can be found at: thecrownestate.co.uk/floww
Kingfisher Bulletins are an important way for the fishing
community to be notified about new developments and
activities in the offshore renewables, cables and aggregates
sectors to help with managing potential navigation risks.
The fortnightly bulletins are available through the KIS-ORCA
website: www.kis-orca.eu
A pilot study has been conducted looking at the interaction
between fishing activity and the development of offshore wind
farms in the Irish Sea, and any potential changes in fishing
patterns. The report, Changes to fishing practices around the
UK as a result of the development of offshore wind farms
Phase 1 is available online: thecrownestate.co.uk/owfish
www.thecrownestate.co.uk|19
 The Crown Estate thecrownestate.co.uk/energy-minerals-
1 St Jamess Market and-infrastructure/offshore-wind-energy
London
@TheCrownEstate
SW1Y 4AH
020 7851 5000 Correct as of June 2017, unless otherwise stated.

With thanks to North East Lincolnshire Council, Monty Rakusen and Dave Moss for providing several of the images in this report.
Crown Copyright 2017, all rights reserved. Ordnance Survey Data: Licence No. 100019722,
www.thecrownestate.co.uk/ordnance-survey-licence. Limits: Supplied by UKHO. Not to be used for Navigation.